Senators sold stocks just before steep market losses from coronavirus

Senator Richard Burr (R-NC) heads back to the Senate floor following a recess in the Senate impeachment trial of President Donald Trump on Feb. 3, 2020, in Washington, DC. (Samuel Corum/Getty Images)

Facing public outrage, senators in both political parties denied Friday that they exploited advance knowledge when they dumped stocks and other financial holdings before the coronavirus wreaked havoc on the economy.

Senate Intelligence Committee Chairman Richard Burr, R-N.C., whose sales of as much as $1.7 million in stocks have come under the most scrutiny, requested an ethics review of his actions in the days before markets dropped in February. But Burr and all the other senators pushed back strongly against suggestions that they used sensitive government information to protect their financial well-being.

The actions by the handful of senators, whose stock transactions are documented in mandatory filings to the Senate, attracted heavy scrutiny as the coronavirus pandemic continues to disrupt everyday life, wiping out jobs and personal wealth. At a moment when political leaders are urging Americans to make shared sacrifices to stop the virus, some questioned whether lawmakers were doing the same.

“It appears that in a time of crisis, these senators chose instead to serve themselves, violating the public trust and abdicating their duty,” said Noah Bookbinder, the director the group Citizens for Responsibility and Ethics in Washington, which filed a Senate ethics complaint against Burr and Republican Sen. Kelly Loeffler of Georgia. “They must be immediately investigated.”

The mandatory disclosures senators must make do not detail specific amounts of stock sales. Instead, they give a range in dollars of the value of each transaction.

Senate records show that Burr and his wife sold between roughly $600,000 and $1.7 million in more than 30 separate transactions in late January and mid-February, just before the market began to plummet and government health officials began to sound alarms about the virus. Several of the stocks were in companies that own hotels.

In a statement Friday, Burr said he had asked for the Senate Ethics Committee to investigate, “understanding the assumption many could make in hindsight.” He acknowledged selling the stocks because of the virus.

Burr said he relied “solely on public news reports,” specifically CNBC’s daily health and science reporting out of Asia, to make the financial decisions.

There is no indication that Burr, who does not plan to run for reelection in 2022, was acting on inside information. The intelligence panel he leads did not have any briefings on the pandemic the week when most of the stocks were sold, according to a person familiar with the matter. The person declined to be identified to discuss confidential committee activity.

Senators did receive a closed-door briefing on the virus on Jan. 24, which was public knowledge. A separate briefing was held Feb. 12 by the Senate Health, Education, Labor and Pensions Committee, which Burr is a member of. It’s unclear if he attended either session.

The stock sales were first reported by ProPublica and The Center for Responsive Politics. Most of them came on Feb. 13, just before Burr made a speech in Washington, D.C., in which he predicted severe consequences from the virus, according to audio obtained by National Public Radio and released Thursday.

Burr told the small North Carolina State Society audience that the virus was “much more aggressive in its transmission than anything that we have seen in recent history” and “probably more akin to the 1918 pandemic.”

In a tweet on Thursday, Burr said that Americans were already being warned about the effects of the virus when he made the speech to the North Carolina State Society.

“The message I shared with my constituents is the one public health officials urged all of us to heed as coronavirus spread increased,” Burr wrote. “Be prepared.”

Burr’s North Carolina colleague, Republican Sen. Thom Tillis, tweeted that the ethics review of the stock sales was appropriate. Asked in the Capitol about Burr’s sales, Senate Majority Leader Mitch McConnell did not respond.

Burr was not the only lawmaker to sell off stocks before the market slide. Loeffler, a new senator up for reelection this year, sold hundreds of thousands of dollars worth of stock in late January and February, as senators began to get briefings on the virus, according to records. So did fellow Georgia Sen. David Perdue, another Republican lawmaker running for reelection, and also Republican Sen. James Inhofe of Oklahoma and Democratic Sen. Dianne Feinstein of California.

Loeffler’s sales were first reported by the Daily Beast. In a tweet early Friday morning, she called it a “ridiculous & baseless attack.”

“Investment decisions are made by multiple third-party advisors without my or my husband’s knowledge or involvement,” she tweeted. She said she was informed of the decisions three weeks after they were made. Loeffler is married to Jeffrey Sprecher, the chairman and CEO of financial powerhouse Intercontinental Exchange.

Loeffler and her husband offloaded anywhere between about $1.1 million and $2.8 million in stock. But they plunged between $315,000 and $650,000 into real estate investment firm Blackstone, tech company Oracle and Citrix Systems — a company that develops workplace and telecommuting software.

Perdue sold off as much as $770,000 in stock in February.

In more than 40 separate transactions, he dropped a wide array of holdings, including as much as $165,000 in stock in the Nevada-based casino company that owns Caesars Palace in Las Vegas. The industry has been battered by the virus, which has led casinos to shut down. In the days after he sold the shares, the value of Caesars Entertainment Corporation stock cratered.

He also purchased shares in Disney and Delta, two companies hard hit by the pandemic.

Perdue attended a Feb. 25 Senate Armed Services committee meeting where spread of the coronavirus was discussed. In the days after, he invested as much as $260,000 in pharmaceutical company Pfizer, according to a disclosure.

Perdue spokeswoman Casey Black said the senator has an outside adviser manage his investments and “goes above and beyond to fully comply with the law.”

Feinstein reported that her husband sold off between $1.5 million and $6 million worth of stock in Allogene Therapeutics more than a month ago. The San Francisco-based biotech company researches and develops cures for cancer.

Feinstein, who also sits on the intelligence panel, said in a statement that she didn’t attend the Jan. 24 briefing and had no input in her husband’s decisions.

“This company is unrelated to any work on the coronavirus and the sale was unrelated to the situation,” she said.

Inhofe, meanwhile, sold anywhere between roughly $395,000 and $850,000 worth of stock he held in multiple companies in late January and early February, according to a disclosure.

Inhofe tweeted that he has no involvement in his investment decisions after asking his financial adviser to move him out of stocks and into mutual funds “to avoid any appearance of controversy.” He said he made that move in December 2018, shortly after becoming chairman of the Senate Armed Services Committee.

President Donald Trump, who has faced persistent questions about whether his family is profiting from his office, declined to say whether the sales should be investigated.

“I don’t know because I’d have to look at it.” He said of the senators: “I find them to be honorable people.”